Weakening dollar helps ETF inflows
On the back of a weakening Australian dollar, investors have shown particular interest in currency exchange-traded funds (ETFs), a fact which has resulted in substantial inflows and a doubling of average daily values, according to Alex Vyonkur, managing director of BetaShares.
"There has been strong interest from advisers and retail investors in our currency ETF products over the last two months, with significant net inflows and increased trading value," he said.
"Enquiries have also increased dramatically, with our currency ETF website traffic increasing 250 per cent since April, as people consider ways to profit from or protect against a weakening Australian dollar."
Outside of currency returns, Vyonkur said that advisers were also using US dollar ETFs for transition management, with many paring back international equities positions in light of recent volatility but still wanting to preserve their US dollar currency exposure.
"We are beginning to see advisers follow the lead of institutional investors in adopting strategies such as transition management and sector tilting," he said. "They're looking to complement the more traditional passive investment strategies."
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